Mutual fund and method for allocating assets in a mutual fund

Abstract

In an embodiment, an asset allocation mutual fund comprises assets invested, at any one time, substantially 100% in one of stocks, bonds or cash equivalents. As market conditions change, as indicated by changes in the output of stock and bond models, substantially all of the assets may be shifted from one of these three asset classes to another. A method for allocating assets in a mutual fund, among the three asset classes, according to one embodiment includes, first determining whether a buy signal has been given on stocks using a stock model. If a buy signal has been given on stocks, substantially all assets of the mutual fund may be invested in stocks. If a buy signal on stocks is not indicated, it is determined whether a buy signal has been given on bonds using a bond model. If a buy signal has been given on bonds, substantially all assets of the mutual fund may be invested in bonds. If a buy signal on bonds is not indicated, substantially all assets of the mutual fund may be invested in cash equivalents. The method may be repeatedly queried over time to consider re-allocation of assets.

1. A computer implemented method for allocating assets in a mutual fund among a stocks asset class, a bonds asset class, and a cash equivalents asset class, comprising:
 determining in a computer system first whether a buy signal has been given for stocks using a stock model queried on a change in financial indices; 
 investing all assets of the mutual fund in stocks if a buy signal has been given for stocks using the computer system; 
 if a buy signal for stocks is not indicated, determining in the computer system second whether a buy signal has been given for bonds using a bond model queried on the change in financial indices; 
 investing all assets of the mutual fund in bonds if a buy signal has been given for bonds using the computer system; and 
 if a buy signal for bonds is not indicated, investing all assets of the mutual fund in cash equivalents using the computer system, 
 wherein at any given time, except during a process of transitioning assets in the mutual fund from one asset class to another, all assets in the mutual fund reside in only one asset class. 
 
     
     
       2. The method of  claim 1 , further comprising querying the method steps on a cyclical basis. 
     
     
       3. The method of  claim 2 , wherein the cyclical basis comprises one of a daily, weekly, monthly, quarterly and irregular cycle. 
     
     
       4. The method of  claim 1 , further comprising querying the method steps on an event-driven basis. 
     
     
       5. The method of  claim 1 , wherein the step of investing in stocks comprises investing directly in stocks. 
     
     
       6. The method of  claim 1 , wherein the step of investing in stocks comprises investing in stock-based, exchange-traded funds. 
     
     
       7. The method of  claim 1 , wherein the bonds comprise investment-grade bonds. 
     
     
       8. The method of  claim 7 , wherein the step of investing in bonds comprises investing directly in bonds. 
     
     
       9. The method of  claim 7 , wherein the step of investing in bonds comprises investing in bond-based, exchange-traded funds. 
     
     
       10. The method of  claim 1 , wherein the cash equivalents comprise money market instruments. 
     
     
       11. The method of  claim 10 , wherein the money market instruments comprise investment-grade, U.S. dollar-denominated debt securities that have remaining maturities of one year or less. 
     
     
       12. The method of  claim 11 , wherein the money market instruments comprise at least one of” obligations of the U.S. government, its agencies and instrumentalities; repurchase agreements collateralized by obligations of the U.S. government, its agencies and instrumentalities; commercial paper or other short-term corporate obligations; certificates of deposit; bankers acceptances; money market funds; short-term investment funds; and variable rate-demand notes.